Nana Appiah Mensah aka NAM1
The woes of embattled gold dealership firm, Menzgold Ghana Limited and its Chief Executive Officer (CEO), Nana Appiah Mensah, have worsened, as an Accra High Court has dismissed a suit filed against the Bank of Ghana (BoG) and the Securities and Commission (SEC) for shutting down its gold collectibles business.
Menzgold, in September last year, proceeded to court to challenge the decision of the two regulators to stop its deposit-taking activities.
The dismissal of the suit by the court is the latest setback for the management of the company which wants to revive its operations.
An Accra Circuit Court on Wednesday issued a warrant for the arrest of Nana Appiah Mensah, CEO of the company and some directors, including Rose Tetteh, who is believed to be his wife and Benedicta Mensah, the sister.
Suit
Menzgold, in the suit, averred that the SEC’s decision to shut down its business is “premature, hasty, arbitrary and clearly intended to affect its accrued rights and customers in a prejudicial manner.”
The company, which has over one million customers, was seeking a declaration that the order by the SEC constitutes “an abuse of its discretionary powers and is arbitrary, capricious and contrary to Articles 23 and 296 of the 1992 Constitution.”
Lawyers for SEC filed an application to raise preliminary objection against the suit filed by Menzgold. The lawyers for the regulator contended that.
The lawyers, therefore, prayed the court to dismiss the suit filed by Menzgold since it failed to exhaust all the internal mechanisms for resolving such matters before proceeding to court.
The court, presided over by Justice Akua Sapormaa Amoah, dismissed the suit filed by Menzgold after considering the application by the SEC.
Suspension
The Central Bank, in a notice on Monday, August 6, 2018, indicated that Menzgold’s deposit-taking activities are in breach of Section 6 (1) of Banks and Specialized Deposit-Taking Institutions Law (Act 930, 2016) since it has not been licensed to take deposits.
The apex bank revealed that it was in talks with other relevant regulatory authorities to take appropriate action against the company.
SEC, in a letter dated September 7, 2018, ordered Menzgold Ghana Limited to stop trading in gold collectibles.
The Commission revealed that the aspect of Menzgold’s business, which involves the purchase/deposit of gold collectibles from the public and contracts issued with guaranteed returns with clients, is a capital markets activity (issuance of gold-backed depository notes to the public) under Act 929 without a valid licence issued by SEC contrary to Section 109 of Act 929 with consequences under section 206 (1) of the same act.”
However, the company was allowed to continue its “other businesses of assaying, purchasing gold from small-scale miners and export of gold.”
Legal battle
Menzgold Ghana Limited later carried out its threat to sue BoG by dragging the Central Bank and SEC to an Accra High Court over the suspension of its operations.
According to a suit filed by its lawyer, Kwame Boafo Akuffo, the order by the SEC to Menzgold had harmed its reputation as a firm.
Menzgold, in the statement of claim, averred that it stated emphatically in several correspondences to the BoG and SEC that it does not accept deposits from customers or undertake deposit-taking business.
It said the company’s activities are restricted to, among others, allowing customers to sell gold on its vault market and this is neither within the present legislated scope of the Banks and Specialised Deposit-Taking Institutions Act, 2016, Act 930 nor within the present legislated scope of the Security Industry Act.
Menzgold was praying the court to set aside the directive of the SEC.
By Gibril Abdul Razak